Nobel laureate Joseph Stiglitz, a former chief economist at the World Bank and arch critic of the IMF, has made an interesting prediction. He has not forecast the end of the euro, as some are paraphrasing him, rather that the euro may continue, but with one member missing: Germany.

From Ireland’s point of view, things are not fair. First of all, she did what the credit rating agencies urged, and launched a drastic austerity drive. And how was she rewarded? The credit rating agencies cut her credit rating.

Unlike Greece, Ireland did not get out the begging bowl and appeal to the EU and IMF for a handout. Instead, she soldiered on. As a result, she forks out at higher interest rates on her debt than Greece. Well, at least she does to an extent.

But to cap it all, her exports are stymied by the euro.

Look at it this way. The UK too had a credit and housing bubble, not as great as Ireland’s, but severe nonetheless. And so the pound falls. Poor old Ireland. The UK is her main export market. She has a more severe crisis than her bigger neighbour, but unlike the UK does not enjoy a terms of trade benefit.

The advantages to Ireland of leaving the euro are obvious. But there are snags. Firstly, if she re-launched the punt, this would almost certainly crash in value, making her exporters far more competitive. But as her debts are held in euros, this in turn would mean her debts would shoot up in value, making them unaffordable. Default would then be inevitable. Then again, a growing number of people are saying, so what? – default it will have to be then.

There is another snag, however. It is just possible that the Irish would not accept a new punt. For that matter, the Spanish might not accept a new peseta. Businesses would insist on being paid in euros, and the new currencies would be dead just as they were born.

Writing in the Independent, Stephen King made precisely this point. He suggested the only possible solution would be closer political union. See: Will Europe’s debt crisis lead to closer political union?

This is what makes the comments from Mr Stiglitz interesting. He has penned a new edition of his book, Freefall, and yesterday gave the Sunday Telegraph a sneak preview. Although Uncle Joe is a former winner of the Nobel Memorial Prize for Economics, he made his name as an arch critic of the IMF during the 1997 Asian crisis. At that time, the Asia tigers hit crisis; the IMF bailed them out, but in return insisted on a severe austerity regime, higher rates and tried to ensure local currencies stayed high. Stiglitz suggested these policies led to an economic depression in the countries concerned.

Now, of course, he is seeing parallels with the Eurozone’s more indebted countries.

Frankly, Mr Stiglitz has a point. It really does seem that, looking forward, the euro can go one of three ways: it can see closer political union, in which the richer regions subsidise the poorer ones. It could see the indebted countries leave the euro, or it could see Germany exit. Frankly, we would have thought the third scenario is by far the most likely.

Investment and Business News is a succinct, erudite and informative roundup of today’s top news stories on business and the economy, with analysis thrown in. It’s free, and to subscribe: visit our home page and select subscribe